Loading...
87-9180 IRB Presbyterian ManorHINKLE, EBERHART, ELKOURI & JENSEN 1 ORDINANCE NO. 87-9180 of the CITY OF SALINA, KANSAS u Authorizing the Issuance of $800,000 Industrial Revenue Bonds Series 1987 (Salina Presbyterian Manor, Inc.) DATED AS OF APRIL 1, 1987 1 (Published in The Salina Journal, ���^/� �J� 1987) ORDINANCE NO. 87-9180 AN ORDINANCE SUPPLEMENTING ORDINANCE NO. 8639 OF THE CITY OF SALINA, KANSAS, AND AUTHORIZING' THE CITY TO PURCHASE, CONSTRUCT AND EQUIP CERTAIN BUILDINGS, IMPROVEMENTS, MACHINERY AND EQUIPMENT AS AN ADDITION TO A FACILITY ON LAND PREVIOUSLY ACQUIRED BY THE CITY AND LEASED TO SALINA PRESBYTERIAN MANOR, INC.; AUTHORIZING AND DIRECTING THE ISSUANCE OF $800,000 PRINCIPAL AMOUNT OF INDUSTRIAL REVENUE BONDS, SERIES 1987 OF SAID CITY FOR THE PURPOSE OF PROVIDING FUNDS TO PAY THE COST OF PURCHASING, CONSTRUCTING AND EQUIPPING SAID ADDITION; PRESCRIBING THE FORM AND AUTHORIZING THE EXECUTION OF A SUPPLEMENTAL LEASE BY AND BETWEEN SAID CITY AND SALINA PRESBYTERIAN MANOR, INC.; AND PRESCRIBING THE FORM AND REQUIRING THE EXECUTION OF A SEPARATE GUARANTY AGREEMENT BY UNITED PRESBYTERIAN FOUNDATION OF KANSAS, INC. AND SALINA PRESBYTERIAN MANOR, INC., AS GUARANTORS. WHEREAS, the City of Salina, Kansas, a city of the rst class, hereinafter sometimes referred to as the "City", sires to promote, stimulate and develop the general economic lfare and prosperity of the City of Salina, Kansas, and its virons and thereby to further promote, stimulate and develop e general economic welfare and prosperity of the State of nsas; and WHEREAS, the City of Salina, Kansas, by Ordinance No. 639 authorized the City to acquire a tract of land in Salina, ansas, for commercial purposes, and authorized the payment of he cost of acquiring such land and purchasing, constructing nd equipping thereon a commercial facility, and further uthorized and directed the issuance of $2,000,000 principal mount Industrial Revenue Bonds of the City to pay such costs hereinafter sometimes called the "1978 Bonds"); and further uthorized the execution of a Lease between the City, as andlord, and Salina Presbyterian Manor, Inc., a Kansas ot—for—profit corporation, as Tenant, (which Lease, as upplemented by the Supplemental Lease hereafter referenced, s hereafter sometimes called the "Lease"); and WHEREAS, the City of Salina, Kansas did enter into such Lease, did acquire such tract of land, did issue the 1978 WHEREAS, pursuant to the provision of K.S.A. 12-1740 0 12+1749a, as amended (hereinafter referred to as the Act")° said City is authorized to issue Industrial Revenue onds of the City, and it is hereby found and determined. to be dvisable and in the interest and for the welfare of the City nd its inhabitants that Industrial Revenue Bonds of the City n the principal amount of $800,000 be authorized and issued, or the purpose of providing funds to pay the balance of the forementioned costs. NOW, THEREFORE, BE IT ORDAINED BY THE GOVERNING BODY F THE CITY OF SALINA, KANSAS: SECTION 1: Description of Facility. As used herein, he term "Facility" shall include the original facility financed by the 1978 Bonds and the Bonds hereinafter uthorized. The additions financed with the proceeds of the onds are further described in Schedule I attached hereto and ncorporated herein by reference. SECTION 2: Authorization of and Security for the onds . For the purpose of providing funds to pay the cost of cquiring, constructing and equipping certain additions to the orementioned facility, there shall be issued and hereby are uthorized and directed to be issued Industrial Revenue Bonds, eries 1987, of the City of Salina, Kansas, in the principal mount of $800,000 (hereinafter sometimes referred to as the Bonds"). The Bonds and all interest thereon shall be paid lolely from the money and revenue received from the fees harged and rental received for the use of the Facility and ot from any other fund or source (except to the extent paid ut of the moneys attributable to Bond proceeds or the income rom the temporary investment thereof and, under certain ircumstances as hereinafter and in the Lease provided, roceeds of insurance, sale and condemnation awards) and the ity ,hereby pledges the Facility and the net earnings herefrom to the payment of the Bonds, the. 1978 Bonds, and the nterest thereon. The Bonds shall be equal in priority and ien to the 1978 Bonds. SECTION 3. Description and Details of the Bonds, lesiqnation of Paying Agent. The Bonds shall be dated April 1987, and shall be issued as fully registered Bonds in ncrements of $5,000 or any multiples thereof. Said Bonds hall become due on June 1 in each of the following years and hall bear interest from date at the respective rates as ollows: -2- '�" onds and did purchase, construct and equip thereon such acility; and WHEREAS, Ordinance No. 8639 authorized the issuance f additional bonds to be on a parity with and co -equal with he outstanding 1978 Bonds upon certain conditions; and the ity finds that such specified conditions have been and will e met; and WHEREAS, pursuant to the provision of K.S.A. 12-1740 0 12+1749a, as amended (hereinafter referred to as the Act")° said City is authorized to issue Industrial Revenue onds of the City, and it is hereby found and determined. to be dvisable and in the interest and for the welfare of the City nd its inhabitants that Industrial Revenue Bonds of the City n the principal amount of $800,000 be authorized and issued, or the purpose of providing funds to pay the balance of the forementioned costs. NOW, THEREFORE, BE IT ORDAINED BY THE GOVERNING BODY F THE CITY OF SALINA, KANSAS: SECTION 1: Description of Facility. As used herein, he term "Facility" shall include the original facility financed by the 1978 Bonds and the Bonds hereinafter uthorized. The additions financed with the proceeds of the onds are further described in Schedule I attached hereto and ncorporated herein by reference. SECTION 2: Authorization of and Security for the onds . For the purpose of providing funds to pay the cost of cquiring, constructing and equipping certain additions to the orementioned facility, there shall be issued and hereby are uthorized and directed to be issued Industrial Revenue Bonds, eries 1987, of the City of Salina, Kansas, in the principal mount of $800,000 (hereinafter sometimes referred to as the Bonds"). The Bonds and all interest thereon shall be paid lolely from the money and revenue received from the fees harged and rental received for the use of the Facility and ot from any other fund or source (except to the extent paid ut of the moneys attributable to Bond proceeds or the income rom the temporary investment thereof and, under certain ircumstances as hereinafter and in the Lease provided, roceeds of insurance, sale and condemnation awards) and the ity ,hereby pledges the Facility and the net earnings herefrom to the payment of the Bonds, the. 1978 Bonds, and the nterest thereon. The Bonds shall be equal in priority and ien to the 1978 Bonds. SECTION 3. Description and Details of the Bonds, lesiqnation of Paying Agent. The Bonds shall be dated April 1987, and shall be issued as fully registered Bonds in ncrements of $5,000 or any multiples thereof. Said Bonds hall become due on June 1 in each of the following years and hall bear interest from date at the respective rates as ollows: -2- '�" TERM BONDS 2002 165,000 8.00% 2008 375,000 8.25% The Bonds shall bear interest from their date payable ecember 1, 1987 and thereafter semiannually on each June 1 and ecember 1 (the "Interest Payment Dates"). The Bonds shall bear interest from their effective ate of registration on the Interest Payment Dates in each year o the registered owner thereof as shown on the books of the fiscal Agent on November 15 or May 15, as the case may be, (the Record Date") next preceding such Interest Payment Date. The ffective date of registration shall be set forth on each such ond, such effective date of registration to be as of the nterest Payment Date next preceding the date of authentication hereof by the Fiscal Agent, unless such date of authentication hall be an Interest Payment Date, in which case the effective ate of registration shall be as of such date of uthentication, or unless the date of authentication shall be rior to the first Interest Payment Date, in which case the ffective date of registration shall be the date of the Bonds; rovided, however, that if payment of the interest on the Bonds hall be in default at the time of authentication of any Bonds ssued in lieu of Bonds surrendered for transfer or exchange, he effective date of registration shall be as of the date to hick interest has been paid in full on the Bonds surrendered. Maturity SERIAL BONDS Principal Interest shall June 1 Amount Rate to the registered 1989 $ 20,000 5.90% awful money of the United 1990 20,000 6.00% 1991 20,000 6.25% bank 1992 25,000 6.50% agent 1993 25,000 6.70"6 gent for the payment of 1994 25,000 6.80,6 the 1995 30,000 6.90% the 1996 30,000 7.00% 1997 30,000 7.15% 1998 35,000 7.25% TERM BONDS 2002 165,000 8.00% 2008 375,000 8.25% The Bonds shall bear interest from their date payable ecember 1, 1987 and thereafter semiannually on each June 1 and ecember 1 (the "Interest Payment Dates"). The Bonds shall bear interest from their effective ate of registration on the Interest Payment Dates in each year o the registered owner thereof as shown on the books of the fiscal Agent on November 15 or May 15, as the case may be, (the Record Date") next preceding such Interest Payment Date. The ffective date of registration shall be set forth on each such ond, such effective date of registration to be as of the nterest Payment Date next preceding the date of authentication hereof by the Fiscal Agent, unless such date of authentication hall be an Interest Payment Date, in which case the effective ate of registration shall be as of such date of uthentication, or unless the date of authentication shall be rior to the first Interest Payment Date, in which case the ffective date of registration shall be the date of the Bonds; rovided, however, that if payment of the interest on the Bonds hall be in default at the time of authentication of any Bonds ssued in lieu of Bonds surrendered for transfer or exchange, he effective date of registration shall be as of the date to hick interest has been paid in full on the Bonds surrendered. -3- _ I - - ,"mr Principal of and interest on the Bonds shall be ayable by check or draft to the registered owner thereof in awful money of the United States of America paid by First Bank nd Trust Company, in the City of Salina, Kansas, such bank eing hereby designated as the City's fiscal agent and paying gent for the payment of the principal of and interest on the onds herein authorized and sometimes referred to herein as the Fiscal Agent" and "Paying Agent". -3- _ I - - ,"mr The Bonds shall be subject to redemption and payment rior to the stated maturity thereof only as provided in ection 4 of this Ordinance. SECTION 4. Redemption and Payment of Bond Prior to aturi.t . The Bonds shall be subject to redemption and payment rior to the stated maturity thereof, as follows: (a) Extraordinary Optional Redemption. In the event f a Change in Circumstances, the Bonds shall be subject to edemption and payment prior to the stated maturity thereof, at he option of the City, upon instructions from the Tenant, on ny date at a redemption price equal to the par value of the rincipal amount thereof, plus accrued interest thereon to the edemption date, without premium, provided all of the Bonds are o redeemed and paid according to their terms. (b) Optional Redemption. The Bonds, maturing in the ear 1997 and thereafter shall be subject to redemption and ayment prior to maturity, at the option of the City, upon nstructions from the Tenant, on and after June 1, 1996, as a hole at any time, or in part on any Interest Payment Date, at he respective redemption prices (expressed as percentages of rincipal amount) set forth below, plus accrued interest hereon to the date fixed for redemption and payment: (c) Sinking Fund Redemption. Each of said Bonds maturing on June 1, 2002, shall be ubject to mandatory redemption and payment from the sinking and hereafter described on June 1, 1999, or on June 1 of any ear thereafter pursuant to the redemption schedule hereafter et out, at the principal amount thereof, plus accrued interest hereon to date fixed for redemption and payment, without remium. As and for a sinking fund for the retirement of the onds maturing June 1, 2002, but subject to the provisions of he next paragraph of this Section, the rent payments specified Ln the Supplemental Lease which are to be deposited in the rincipal and Interest Payment Account created by Ordinance No. 639 commencing on June 1, 1998, (the "Sinking Fund Deposits"), hall be sufficient to redeem (after credit as hereinafter rovided) and the City hereby agrees to redeem the following —4— ' Redemption Dates Redemption (Both Inclusive) Prices une 1, 1996 to May 31, 1997 103% une 1, 1997 to May 31, 1998 102 1/2% une 1, 1988 to May 31, 1999 102% une 1, 1999 to May 31, 2000 101 1/2% une 1, 2000 to May 31, 2001 101% une 1, 2001 to May 31, 2002 100 1/2% une 1, 2002 and thereafter 100% (c) Sinking Fund Redemption. Each of said Bonds maturing on June 1, 2002, shall be ubject to mandatory redemption and payment from the sinking and hereafter described on June 1, 1999, or on June 1 of any ear thereafter pursuant to the redemption schedule hereafter et out, at the principal amount thereof, plus accrued interest hereon to date fixed for redemption and payment, without remium. As and for a sinking fund for the retirement of the onds maturing June 1, 2002, but subject to the provisions of he next paragraph of this Section, the rent payments specified Ln the Supplemental Lease which are to be deposited in the rincipal and Interest Payment Account created by Ordinance No. 639 commencing on June 1, 1998, (the "Sinking Fund Deposits"), hall be sufficient to redeem (after credit as hereinafter rovided) and the City hereby agrees to redeem the following —4— incipal amounts of Bonds maturing June 1, 2002, on June 1 in ch of the following years: YEAR PRINCIPAL AMOUNT 1999 $ 35,000 2000 40,000 2001 45,000 (Leaving $45,000 to mature June 1, 2002) Each of said Bonds maturing on June 1, 2008, shall be bject to mandatory redemption and payment from the sinking nd hereafter described on June 1, 2003, or on June 1 of any ar thereafter pursuant to the redemption schedule hereafter t out, at the principal amount thereof, plus accrued interest ereon to date fixed for redemption and payment, without emium. As and for a sinking fund for the retirement of the nds maturing June 1, 2008, but subject to the provisions of he next paragraph of this Section, the rent payments specified n the Supplemental Lease which are to be deposited in the rincipal and Interest Payment Account created by Ordinance No. 639 commencing on June 1, 2003, (the "Sinking Fund Deposits"), hall be sufficient to redeem (after credit as hereinafter rovided) and the City hereby agrees to redeem the following rincipal amounts of Bonds maturing June 1, 2008, on June 1 in ach of the following years: YEAR PRINCIPAL AMOUNT 2003 $ 50,000 2004 55,000 2005 60,000 i 2006 65,000 2007 70,000 (Leaving $75,000 to mature June 1, 2008) he Bonds maturing on June 1, 2002 and June 1, 2008, to be edeemed and paid pursuant to the operation of the Sinking Fund hall be selected by lot by the Fiscal Agent in such equitable anner as it may designate. The Fiscal Agent shall each year n which the Bonds are to be redeemed pursuant to the terms of aid Sinking Fund make timely selection of Bonds to be so edeemed and shall give notice thereof as provided in this rdinance without further instructions from the City or the enant. rom the Tenant use moneys on hand in the Principal and nterest Payment Account to purchase Bonds maturing on June 1, 002 or June 1, 2008, respectively, in the open market at a —5— The Fiscal Agent may, at any time after June 1, 1998, n the case of Bonds maturing in 2002 and on or after June 1, 003 in the case of Bonds maturing in 2008, upon instructions rom the Tenant use moneys on hand in the Principal and nterest Payment Account to purchase Bonds maturing on June 1, 002 or June 1, 2008, respectively, in the open market at a —5— rice not in excess of the then applicable redemption price pecified above in subsection (b) of this Section and each and so purchased shall be credited at 100% of the principal mount thereof on the obligation of the City on the next inking Fund redemption date for such Bonds and the principal mount of Bonds to be redeemed by operation of the Sinking and shall be reduced accordingly. At its option, to be exercised: (a) with respect to he Bonds maturing June 1, 2002, on or before the Forty—fifth 45th) day next preceding any June 1 in the years 1998 to 001, inclusive or with respect to the Bonds maturing June 1, 008, on or befor tghe Forty—fifth (45th) day next preceding ny June 1 in the years 2002 to 2007, inclusive, the City or he Tenant may: (i) deliver to the Fiscal Agent for ancellation, any of such Bonds maturing on June 1, 2002 or une 1, 2008, as the case may be, in any aggregate principal mount desired; or (ii) furnish the Fiscal Agent with funds ogether with appropriate instructions, for the purpose of urchasing any of said Bonds maturing on June 1, 2002 or June 2008, from any owner thereof whereupon said Fiscal Agent hall expend such funds for such purpose to such extent as may e practical; or (iii) receive a credit in. respect to the inking Fund obligation of the City under the second preceding aragraph of this Section for any Bonds maturing on June 1, 002 or June 1, 2008, as the case may be, which prior to such ates have been redeemed (other than through the operation of he Sinking Fund requirements of the second preceding aragraph) and cancelled by the Fiscal Agent and not heretofore applied as a credit against any redemption bligation under said paragraph. Each Bond maturing on June 2002 or June 1, 2008, as the case may be, so delivered or urchased or previously redeemed shall be credited at 100% of he principal amount thereof on the obligation of the issuer n such redemption date, and any excess of such amount shall e credited on future Sinking Fund obligations for such Series onds in chronological order and the principal amount of Bonds o be redeemed by operation of the Sinking Fund shall be ccordingly reduced. If the City or the Tenant intends to exercise the ption granted by the provisions of sub—provisions (i), (ii) r (iii) of the next preceding paragraph, the City or the enant will on or before the Forty—fifth (45th) day next receding each June 1 in the years from 1998 to 2003, nclusive, with respect to the Bonds maturing June 1, 2004, nd on or before the Forty—fifth (45th) day next preceding ach June 1 in the years from 2002 to 2007, inclusive, with espect to the Bonds maturing June 1, 2008, inclusive, furnish he Fiscal Agent with a certificate signed by its President or n appropriate officer of the Tenant indicating to what extent he provisions of said sub—provisions (i), (ii) and (iii) are o be complied with in respect to such Sinking Fund payment. SECTION 5. Notice of Redemption. Notice of the call or any redemption provided for by this Ordinance shall be !M iven by registered or certified mail to the registered owner hereof at the address shown on the registration books of the fiscal Agent not less than Thirty (30) days prior to the ademption date; provided, however, that failure to give such otice by mailing as aforesaid, or any defect therein, shall of affect the validity of any proceedings for the redemption f the Bonds. The City, the Fiscal Agent and Tenant may deem and reat the person in whose name a Bond is registered as the bsolute owner- of such Bond, whether such Bond shall be verdue or not, for the purpose of receiving payment of, or on ccount of, the principal of and interest and redemption remium, if any, on such Bond and for all other purposes, and 11 such payments so made to such registered owner or upon his rder shall be valid and effectual to satify and discharge the iability upon such Bond to the extent of the sum or sums o6paid, and neither the City, nor the Fiscal Agent nor Tenant hall be affected by any notice to the contrary, but such egistration may be changed as herein provided. Neither the ity nor the Fiscal Agent shall be required to make any such xchange or transfer of Bonds on or after the Record Date recedinga payment date on the Bonds or, in the case of any roposed redemption of Bonds, during the 15 days immediately receding the selection of Bonds for such redemption or after uch Bonds or any portion thereof has been selected for edemption. —7— SECTION 6. Mutilated, Lost, Stolen or Destroued onds. In the event any Bond shall become mutilated, or be ost, stolen or destroyed, the City shall execute and the fiscal Agent shall authenticate and deliver a new Bond of like eries, date and tenor as the Bond mutilated, lost, stolen or estroyed. Provided that, in the case of any mutilated Bond, uch mutilated Bond shall first be surrendered to the Fiscal gent, and in the case of any lost, stolen or destroyed Bond, here shall be first furnished to the City and the Fiscal gent evidence of such loss, theft or destruction satisfactory o the City and the Fiscal Agent, together with indemnity atisfactory to them. In the event any such Bond shall have atured, instead of issuing a substitute Bond the City may pay r authorize the payment of the same without surrender hereof. Upon the issuance of any substitute Bond, the City nd the Fiscal Agent may require the payment of an amount ufficient to reimburse the City and the Fiscal Agent for any ax or other governmental charge that may be imposed in elation thereto and any other reasonable fees and expenses ncurred in connection therewith. SECTION 7. Registration Provisions, Persons Treated s Owner. The City covenants that it will, so long as the onds remain outstanding, keep at the office of the Fiscal gent books for the registration of the Bonds as herein rovided. The principal of and interest on the Bonds shall be ade payable only to the registered owner, as shown on the egistration books. The Bonds may not be registered to bearer. The City, the Fiscal Agent and Tenant may deem and reat the person in whose name a Bond is registered as the bsolute owner- of such Bond, whether such Bond shall be verdue or not, for the purpose of receiving payment of, or on ccount of, the principal of and interest and redemption remium, if any, on such Bond and for all other purposes, and 11 such payments so made to such registered owner or upon his rder shall be valid and effectual to satify and discharge the iability upon such Bond to the extent of the sum or sums o6paid, and neither the City, nor the Fiscal Agent nor Tenant hall be affected by any notice to the contrary, but such egistration may be changed as herein provided. Neither the ity nor the Fiscal Agent shall be required to make any such xchange or transfer of Bonds on or after the Record Date recedinga payment date on the Bonds or, in the case of any roposed redemption of Bonds, during the 15 days immediately receding the selection of Bonds for such redemption or after uch Bonds or any portion thereof has been selected for edemption. —7— 1 1 SECTION 8. Method of Execution and Authentication of onds. The Bonds shall be executed for and on behalf of the ity by the manual or facsimile signature of the Mayor, ttested by the manual or facsimile signature of the City lerk and the seal of said City shall be affixed thereto or mprinted thereon. In the event either said Mayor or City lerk or both of said officers shall cease to hold such office efore the Bonds bearing their signatures shall have been ssued and delivered, the Bonds may be issued and delivered as hough said officers had not ceased to hold office and such ignatures appearing on the Bonds shall be valid and ufficient for all purposes as if they had remained in office ntil such issuance. The Bonds shall not be a valid obligation under the rovisions of this Ordinance until authenticated by the Fiscal gent by the execution of an appropriate certificate appearing n such Bonds. SECTION 9. Form of Bonds. The Bonds and the ertificates relating thereto shall be in substantially the ollowing form: ME fJ 1 FACE OF THE BOND H United States of America State of Kansas 11 City of Salina, Kansas Industrial Revenue Bond Series 1987 (Salina Presbyterian Manor, Inc.) ate of Maturity Dated nterest: Date: June 1, Date: April. 1, 1987 CUSIP: Registered Owner: Principal Amount: Dollars The City of Salina, Kansas, a municipal corporation of he State of Kansas (the "City"), for value received, promises to ay, but solely from the sources hereinafter referred to, to the egistered owner identified above, or registered assigns, upon he presentation and surrender of this Bond, the principal sum dentified above on the maturity date shown, in any coin or urrency of the United States of America which on the date of ayment thereof is legal tender for the payment of public and rivate debts, at the principal offices of First Bank and Trust ompany, in the City of Salina, Kansas (the "Paying Agent" and Fiscal Agent"), and in like manner to pay to the registered caner ("Owner") hereof, by check or draft mailed to the Owner at is address as it appears on the bond registration books of the ity kept by the Fiscal Agent under the within mentioned rdinance, interest on said principal sum from the effective date f registration of this Bond (which date is set forth on this ond) at the rate of interest shown above per annum payable emiannually on December 1 and June 1 in each year, commencing on ecember 1, 1987, until said principal sum is paid. Reference is hereby made to the further provisions of his Series 1987 Bond set forth on the reverse side hereof and uch further provisions shall for all purposes have the same ffect as if set forth on the face hereof. It is hereby certified and declared that all acts, onditions and things required to exist, happen and be performed recedent to and in the execution and delivery of the Bond rdinance hereinafter described and the issuance of this Bond do xist, have happened and have been, performed in due time, form nd manner as required by law. Wz v IN WITNESS WHEREOF, City has caused this Bond to be xecuted in its name by the ayor and attested by the manual or facsimile manual or facsimile signature signature of the of its ity Clerk and its official seal to be affixed hereto or mprinted hereon, and has caused this Bond to be dated as of pril 1, 1987. i City of Salina, Kansas f Facsimile Seal) By (facsimile signature Joseph M. Ritter, Mayor TTEST: facsimile signature) 1. L. Harrison, City Clerk —10— 1 11 ■ (FORM OF FISCAL AGENT'S CERTIFICATE OF AUTHENTICATION) This Bond is one of the City of Salina, Kansas, Industrial Revenue Bonds, Series 1987 (Salina Presbyterian anor, Inc.), described in the within—mentioned Ordinance. The effective date of registration of this Bond is First Bank and Trust Company, Salina, Kansas, as Fiscal Agent By Authorized Officer = xxx x x = x xa = x x =a x a aaa as aaaa xx x= =xxaa a as a:aaa a s sa sas= xxxa = aaaaa —11— REVERSE OF THE BOND This Bond is one of a duly authorized series of Bonds f the City designated "City of Salina, Kansas, Industrial Revenue Bonds, Series 1987 (Salina Presbyterian Manor, Inc.)", n the aggregate principal amount of $800,000 (the "Bonds"), issued for the purpose of providing funds to pay the cost of purchasing, constructing and installing certain facilities hich, together with the buildings, improvements, machinery and equipment described in Ordinance No. 8639 of the City, onstitutes the "Facility" to be leased by the City to Salina resbyterian Manor, Inc., a Kansas not—for—profit corporation the "Tenant"), under the terms of a Lease Agreement dated as f June 1, 1978, as supplemented by a Supplemental Lease dated s of April 1, 1987, (the "Supplemental Lease") each between he City and the Tenant (said Lease and Supplemental Lease, as mended and supplemented from time to time in accordance with he provisions thereof, being herein -called the "Lease"), all ursuant to the authority of and in conformity with the rovisions, restrictions and limitations of the Constitution nd statutes of the State of Kansas, including particularly .S.A. 12-1740 to 12-1749a, inclusive, as amended, and pursuant o proceedings duly had by the governing body of the City. This Bond does not constitute a debt of said City ithin the meaning of any constitutional or statutory imitation. Reference is hereby made to the Ordinance of the ity authorizing the issuance of the Bonds (the "Bond rdinance"), Ordinance No. 8639 of the City and to the Lease or a description of the covenants of the City with respect to he collection, segregation and application of the money and avenue received from the fees charged and rental received for he use of the Facility, the rights, duties and obligations of he City and the Tenant with respect thereto, the right of the ity to issue additional Bonds and the rights of the registered caner of this Bond. The Bonds are equal in priority and on a parity with The he City of Salina, Kansas Industrial Revenue Bonds, Series to redemption and payment une 1, 1978 (Salina Presbyterian Manor, Inc.) in the aggregate rincipal amount of $2,000,000 (the "1978 Bonds"). stated maturity thereof, The Tenant and United Presbyterian Foundation of ansas have entered into a separate Guaranty Agreement with the (a) fiscal Agent whereby Tenant and United Presbyterian Foundation Redemption. In the event f Kansas have unconditionally guaranteed, for the benefit of he registered owners of the Bonds, the full and prompt payment in Circumstances, the f the principal of and interest and redemption premium, if ny, on the Series 1987 Bonds when and as the same become due nd payable in accordance with its terms. This Bond does not constitute a debt of said City ithin the meaning of any constitutional or statutory imitation. Reference is hereby made to the Ordinance of the ity authorizing the issuance of the Bonds (the "Bond rdinance"), Ordinance No. 8639 of the City and to the Lease or a description of the covenants of the City with respect to he collection, segregation and application of the money and avenue received from the fees charged and rental received for he use of the Facility, the rights, duties and obligations of he City and the Tenant with respect thereto, the right of the ity to issue additional Bonds and the rights of the registered caner of this Bond. —12— The Bonds shall be subject to redemption and payment rior to the stated maturity thereof, as follows: (a) Extraordinary Optional Redemption. In the event f a Change in Circumstances, the Bonds shall be subject to —12— rJedemption and payment prior to the stated maturity thereof, at he option of the City, upon instructions from the Tenant, on ny date at a redemption price equal to the par value of the rincipal amount thereof, plus accrued interest thereon to the ademption date, without premium, provided all of the Bonds are o redeemed and paid according to their terms. (b) Optional Redemption. The Bonds, maturing in the ear 1997 and thereafter shall be subject to redemption and ayment prior to maturity, at the option of the City, upon nstructions from the Tenant, on and after June 1, 1996, as a hole at any time, or in part on any Interest Payment Date, at he respective redemption prices (expressed as percentages of rincipal amount) set forth below, plus accrued interest hereon to the date fixed for redemption and payment: Redemption Dates Redemption (Both Inclusive) Prices une 1, 1996 to May 31, 1997 103% une 1, 1997 to May 31, 1998 102 1/2% une 1, 1988 to May 31, 1999 102% une 1, 1999 to May 31, 2000 101 1/2% une 1, 2000 to May 31, 2001 101% une 1, 2001 to May 31, 2002 100 1/2% une 1, 2002 and thereafter 100% As and for a sinking fund for the retirement of the onds maturing June 1, 2002, but subject to the provisions of he next paragraph of this Section, the rent payments specified n the Supplemental Lease which are to be deposited in the rincipal and Interest Payment Account commencing on June 1, 998, (the "Sinking Fund Deposits"), shall be sufficient to edeem (after credit as hereinafter provided) and the City ereby agrees to redeem the following principal amounts of onds maturing June 1, 2002, on June 1 in each of the following ears: YEAR PRINCIPAL AMOUNT 1999 $ 35,000 2000 40,000 2001 45,000 (Leaving $45,000 to mature June 1, 2002) -13- (c) Sinking Fund Redemption. Each of said Bonds maturing on June 1, 2002, shall be ubject to mandatory redemption and payment from the sinking and hereafter described on June 1, 1999, or on June 1 of any ear thereafter pursuant to the redemption schedule hereafter et out, at the principal amount thereof, plus accrued interest �hereon to date fixed for redemption and payment, without remium. As and for a sinking fund for the retirement of the onds maturing June 1, 2002, but subject to the provisions of he next paragraph of this Section, the rent payments specified n the Supplemental Lease which are to be deposited in the rincipal and Interest Payment Account commencing on June 1, 998, (the "Sinking Fund Deposits"), shall be sufficient to edeem (after credit as hereinafter provided) and the City ereby agrees to redeem the following principal amounts of onds maturing June 1, 2002, on June 1 in each of the following ears: YEAR PRINCIPAL AMOUNT 1999 $ 35,000 2000 40,000 2001 45,000 (Leaving $45,000 to mature June 1, 2002) -13- 1 1 Each of said Bonds maturing on June 1, 2008, shall be ;ubject to mandatory redemption and payment from the sinking und hereafter described on June 1, 2003, or on June 1 of any rear thereafter pursuant to the redemption schedule hereafter ;et out, at the principal amount thereof, plus accrued .nterest thereon to date fixed for redemption and payment, jithout premium. As and for a sinking fund for the retirement of the londs maturing June 1, 2008, but subject to the provisions of :he next paragraph of this Section, the rent payments ;pecified in the Supplemental Lease which are to be deposited .n the Principal and Interest Payment Account commencing on rune 1, 2003, (the "Sinking Fund Deposits"), shall. be ;ufficient to redeem (after credit as hereinafter prov-..ded) snd the City hereby agrees to redeem the following principal imounts of Bonds maturing June 1, 2008, on June 1 in each of :he following years: YEAR PRINCIPAL AMOUNT 2003 $ 50,000 2004 55,000 2005 60,000 2006 65,000 2007 70,000 (Leaving $75,000 to mature June 1, 2008) 'he Bonds maturing on June 1, 2002 and June 1, 2008, to be ,edeemed and paid pursuant to the operation of the Sinking 'und shall be selected by lot by the Fiscal Agent in such !quitable manner as it may designate. 'The Fiscal Agent :shall !ach year in which the Bonds are to be redeemed pursuant to :he terms of said Sinking Fund make timely selection of Bonds :o be so redeemed and shall give notice thereof as providod in :his Ordinance without further instructions from the City or :he Tenant. The Fiscal Agent may, at any time after June 1, :1998, n the case of Bonds maturing in 2002 and on or after June 1, 003 in the case of Bonds maturing in 2008, upon instructions rom the Tenant use moneys on hand in the Principal and nterest Payment Account to purchase Bonds maturing on June 1, 002 or June 1, 2008, respectively, in the open market at a rice not in excess of the then applicable redemption price pecified above in subsection (b) of this Section and each and so purchased shall be credited at 100% of the principal mount thereof on the obligation of the City on the next inking Fund redemption date for such Bonds and the principal mount of Bonds to be redeemed by operation of the Sinking und shall be reduced accordingly. At its option, to be exercised: (a) with respect to :he Bonds maturing June 1, 2002, on or before the Forty—fifth 45th) day next preceding any June 1 in the years 1998 to —14— 1 11 001, inclusive or with respect to the Bonds maturing June 1, 008, on or befor the Forty-fifth (45th) day next preceding ny June 1 in the years 2002 to 2007, inclusive, the City or he Tenant may: (i) deliver to the Fiscal Agent for ancellation, any of such Bonds maturing on June 1, 2002 or une 1, 2008, as the case may be, in any aggregate principal mount desired; or (ii) furnish the Fiscal Agent with funds ogether with appropriate instructions, for the purpose of urchasing any of said Bonds maturing on June 1, 2002 or June 2008, from any owner thereof whereupon said Fiscal Agent hall expend such funds for such purpose to such extent as may e practical; or (iii) receive a credit in respect to the inking Fund obligation of the City under the second preceding aragraph of this Section for any Bonds maturing on June 1, 002 or June 1, 2008, as the case may be, which prior to such `ates have been redeemed (other than through the operation of .he Sinking Fund requirements of the second preceding paragraph) and cancelled by the Fiscal Agent and not :heretofore applied as a credit against any redemption obligation under said paragraph. Each Bond maturing on June 11 2002 or June 1, 2008, as the case may be, so delivered or ►urchased or previously redeemed shall be credited at 100% of :he principal amount thereof on the obligation of the issuer in such redemption date, and any excess of such amount shall ie credited on future Sinking Fund obligations for such Series ►onds in chronological order and the principal amount of Bonds :o be redeemed by operation of the Sinking Fund shall be accordingly reduced. If the City or the Tenant intends to exercise the ption granted by the provisions of sub -provisions (i), (ii) r (iii) of the next preceding paragraph, the City or the enant will on or before the Forty-fifth (45th) day next receding each June i in the years from 1998 to 2003, nclusive, with respect to the Bonds maturing June 1, 2004, end on or before the Forty-fifth (45th) day next preceding !ach June 1 in the years from 2002 to 2007, inclusive, with -espect to the Bonds maturing June 1, 2008, inclusive, furnish :he Fiscal Agent with a certificate signed by its President or �n appropriate officer of the Tenant indicating to what extent :he provisions of said sub -provisions (i), (ii) and (iii) are .o be complied with in respect to such Sinking Fund payment. If called for redemption, this Bond will cease to year interest on the specified redemption date provided funds .or such redemption are on deposit with the Paying Agent prior .o the redemption date. Notice of the call for any redemption irovided for by the Bond Ordinance shall be given by -egistered or certified mail to the registered owner thereof t the address shown on the registration books of the Fiscal gent not less than Thirty (30) days prior to the redemption late; provided, however, that failure to give such notice by sailing as aforesaid, or any defect therein, shall not affect :he validity of any proceedings for the redemption of this ond. -15- n This Bond shall not be valid or binding on said City ntil this Bond shall have been authenticated by the execution y the Fiscal Agent of the Certificate of Authentication lereon. (FORM OF ASSIGNMENT) For value received, the undersigned hereby sells, ssigns and transfers unto Print or Type Name and Address of Transferee he within Bond and all rights thereunder, and hereby uthorizes the transfer of the within Bond on, the books kept by he Fiscal Agent for the registration and transfer of Bonds. ated: NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular. j Signature Guaranteed By: By j Title. ss. s v. s o= = ss ss ess sssssssssss= ss ss sss a s ssssss asssss s s s a. _ _ =ss s —16— 1 l Form of Bond Counsel's Approvinca Opinion Bond Counsel's approving opinion with respect to the uthorization and issuance of the Bonds shall be substantially n the following form, with such modifications, amendments or dditional provisions as Bond Counsel shall approve: I, the undersigned, City Clerk of the City of Salina, ansas hereby certify that the following is a true and correct opy of the complete final legal opinion of Hinkle, Eberhart, lkour* & Jensen, Wichita, Kansas, Bond Counsel, on the within and afid the series of which said Bond is a part, except that t omits the date of such opinion, that said legal opinion was anually executed and was dated and issued as of the date of elivery of and payment for such Bonds, and is on file with first Bank and Trust Company, Salina, Kansas. (facsimile signature) City Clerk of the City of Salina, Kansas -17- 1 I� 1 HINKLE, EBERHART, ELKOURI & JENSEN Attorneys at Law 125 North Market, Suite 1250 Wichita, Kansas 67202 We have acted as Bond Counsel in connection with the ssuance by the City of Salina, Kansas (the "City"), of its ndustrial Revenue Bonds, Series 1987 (Salina Presbyterian nor,�Inc.), dated April 1, 1987 in the aggregate principal mount of $800,000 (the "Bonds"). The Bonds are issuable in he form of fully registered bonds in the denomination of 5,000 or any integral multiple thereof, not exceeding the rincipal amount of the Bonds maturing on any Principal Payment ate. The Bonds will mature on June 1 of each year in the espective principal amounts, and will bear interest from their ffective date of registration payable to the registered owners hereof semiannually on December 1 and June 1 of each year at he respective -rates per annum, as follows: SERIAL BONDS Maturity Principal Interest June 1 Amount Rate 1989 $ 20,000 5.90% 1990 20,000 6.00% 1991 20,000 6.25% 1992 25,000 6.50% 1993 25,000 6.70% 1994 25,000 6.80% 1995 30,000 6.90% 1996 30,000 7.00% 1997 30,000 7.15% 1998 35,000 7.25% TERM BONDS 2002 165,000 8.00% 2008 375,000 8.25% The principal of and interest on the Bonds are payable t the principal office of First Bank and Trust Company, in the ity of Salina, Kansas (the "Fiscal Agent"). The Bonds are ubject to redemption and payment prior to maturity upon the erms and conditions and at the redemption prices set forth in he Ordinance. The Bonds have been authorized and issued under and ursuant to K.S.A. 12-1740 et seq., as amended (the "Act") and he Ordinance hereinafter referred for the purpose of providing unds to pay the costs of acquiring, purchasing, constructing nd installing an addition to an existing Facility described in he Ordinance (the "Facility"). —18— We have examined a certified transcript of proceedings re ating to the authorization and issuance of the Bonds, which tr nscript includes, among other documents and proceedings, the fo lowing: (i) Ordinance adopted by the governing body of the City on April 20, 1987 . (ii) Supplemental Lease Agreement dated as ,of April 1, 1987 (the "Supplemental Lease"), 'between the City and Salina Presbyterian Manor, Inc., a Kansas not—for—profit corporation (the "Tenant"). (iii) Guaranty Agreement dated as of April 1, 1987 (the "Guaranty Agreement"), among the Tenant, Salina Presbyterian Manor, Inc., a Kansas not—for—profit corporation, and United Presbyterian Foundation of Kansas, the ("Guarantors") and the Fiscal Agent for the benefit of the owners of the Bonds. We also have examined the Constitution and statutes of the State of Kansas, insofar as the same relate to the au horization and issuance of the Bonds and the authorization, ex cution and delivery of the Ordinance, the Supplemental Le se and the Guaranty Agreement, and an executed and au henticated Bond of the issue so authorized. Based upon such examination, we are of the opinion, as of the date hereof, as follows: 1. The City is a municipal corporation duly and legally organized and validly existing under the laws of the State of Kansas, and has lawful power and authority to issue the Bonds and to enter into the Ordinance and the Supplemental Lease and to perform its obligations thereunder. 2. The Bonds are in proper form and have been duly a horized and issued in accordance with the Constitution and s tutes of the State of Kansas, including the Act. 3. The Bonds are valid and legally binding limited ot igations of the City according to the terms thereof, pa able as to principal, redemption premium, if any, and i r erest solely from, and secured by a valid and enforceable PI dge and assignment of the rents, revenues and receipts dE ived by City under the Supplemental Lease (except to the e ent payable from proceeds of the Bonds, insurance proceeds, s e or condemnation awards or payments, if any, received . p suant to the Guaranty Agreement), all in the manner provided in the Ordinance. The Bonds do not constitute a debt of the City, the State of Kansas or any political subdivision ttereof and do not constitute an indebtedness within the mEaning of any constitutional or statutory debt limitation or —19— restriction, and are not payable in any manner by taxation. Interest on the Bonds is not an item of tax p eference for purposes of the individual minimum tax. H Wever, the Code includes interest on certain obligations, s ch as the Bonds, in the adjusted net book income of certain c rporations for taxable years after 1986 and would include in t e calculations of alternative minimum taxable income 50% of t e excess of the corporation's adjusted net book income over i s pre—book alternative taxable income (determined without r gard to this adjustment and prior to reduction for certain n t operating losses). —20— GL 4. The Ordinance, the Supplemental Lease and the aranty have been duly authorized, executed and delivered by tf e parties thereto, and constitute valid and legally binding ac reements of the parties thereto, enforceable in accordance with the respective provisions thereof. 5. Under existing law, the interest on the Bonds is exempt from Federal income taxation, subject to certain limitations and exceptions as set forth below. i The Internal Revenue Code of 1986 (the "Code") has made a number of recent changes in the United States income t x laws relating to tax exemption obligations of state and ld cal governments. These changes are generally applicable to t e Bonds. The City and the Tenant have covenanted to take st,ch actions as may be required in order to comply with the p ovisions of the Code. The failure of the City and the To nant to comply with such covenants could adversely affect tie tax exempt status of the Bonds. Among other requirements, ( ) at least 95% of the proceeds of the Bonds must be used by n person other than a Section 501(c)(3) organization or a g vernmental unit; (2) not more than 5% of the proceeds of the B nds can be used directly or indirectly in any unrelated t ade or business; (3) the amount of bond proceeds which may b used to finance the costs of issuance of the bonds may not e Geed 2% of the face amount of the issue; (4) the outstanding t x—exempt bonds allocated to the Tenant and certain related o ganizations may not exceed $150,000,000; (5) the average m turity of the Bonds may not exceed 120% of the .average r asonably expected economic life of the facilities financed w th the net proceeds of the issue; (6') none of the proceeds o the Bonds may be used to provide any airplane, skybox or o her luxury box, gambling facility, or store for the sale of a coholic beverages; (7) the issuance of the Bonds must have b en approved after a public hearing following reasonable p blit notice; (8) certain excess investment earnings must be p riodically calculated and rebated to the United States; (9) t e Bonds may not in any other respect constitute "arbitrage b nds" as defined in the Code; and (10) the City must comply w th requirements to respond certain information concerning t e Bonds to the Treasury Department. Interest on the Bonds is not an item of tax p eference for purposes of the individual minimum tax. H Wever, the Code includes interest on certain obligations, s ch as the Bonds, in the adjusted net book income of certain c rporations for taxable years after 1986 and would include in t e calculations of alternative minimum taxable income 50% of t e excess of the corporation's adjusted net book income over i s pre—book alternative taxable income (determined without r gard to this adjustment and prior to reduction for certain n t operating losses). —20— -21- Furthermore, under the provisions of the Code, pr perty and casualty insurance companies are required for to th able years beginning on or after January 1, 1987, to reduce amount of their deductible underwriting losses by a pe centage of the amount of tax exempt interest received or ac rued on obligations acquired after August 7, 1986. In addition, the Code provides that banks and thrift in titutions will be unable to deduct any portion of the in Brest cost of purchasing or carrying tax exempt obligations (w th curtain exceptions described below) if such interest co is ar,e incurred in taxable years ending after December 31, 19 1,6 with respect to bonds acquired after August 7, 1986. The Co a further provides that certain "qualified tax exempt ob igations" will be treated as having been acquired on August 7, 1986. The City has designated the Bonds as "qualified tax ex mpt obligations" as described above. H.R. 2005, the Superfund Amendments and Re uthorization Code of 1986, includes among its provisions th imposition of a new environmental tax, which is based ge erally on a percentage of corporate alternative minimum to able income, including interest on tax exempt obligations su h as the Bonds. The tax is imposed whether or not the to payer is subject to the alternative minimum tax, and is effective for taxable years beginning 1991. The imposition of th s environmental tax could result in additional taxes on in erest on the Bonds for certain corporate bondowners. 6. Under existing law the interest on the Bonds is exempt from income taxation by the State of Kansas and the Bonds are exempt from intangible personal property taxes levied by Kansas counties, cities and townships. The rights of the owners of the Bonds and the en orceability of the Bonds, the Supplemental Lease and the Gu ranty may be subject to bankruptcy, insolvency, re rganization, moratorium and other similar laws affecting cr ditor's rights heretofore or hereafter enacted and their en orcement may be subject to the exercise of judicial di cretion in accordance with general principles of equity. We have not participated in the preparation of the Official Statement relating to the Bonds and express no o 'nion regarding the accuracy or sufficiency of other matters co tained therein, except as respects the paragraphs entitled " dinance", "Supplemental Lease" and "Guaranty Agreement". This opinion does not extend to documents, agreements, re resentations or other materials of any kind concerning the Bolds not specifically mentioned herein and should not be colsidered as inclusive of any matters which are not set forth he -Bin. HINKLE, EBERHART, ELKOURI & JENSEN -21- SECTION 10. Authentication, Execution and Delivery of t je Bonds. The Mayor and City Clerk are hereby authorized and directed to prepare and execute the Bonds herein authorized, in the manner hereinbefore specified, and to obtain its a thentication by the Fiscal Agent and to cause said Fiscal Agent to deliver said Bonds to the purchaser thereof, on payment of the purchase price therefor. The Fiscal Agent shall authenticate s id Bonds in the principal amount of $800,000 and deliver the s e as provided above. SECTION 11. Designation of Fiscal Agent. First Bank arid Trost Company, in the City of Salina, Kansas, is hereby designated as the City's Fiscal Agent under the provisions of this Ordinance and of said Supplemental Lease, and the proceeds of' the said Bonds shall be deposited with said Fiscal Agent. SECTION 12. -Maintenance of Prior Funds and Accounts. The Construction Fund, Principal and Interest Account and Bond Reserve Account created by Ordinance No. 8639 shall be held and maintained by the Fiscal Agent and administered and invested in accordance with the provisions of said Ordinance No. 8639. The m nthly deposits in the Bond Reserve Account as set forth in 0 dinance 8639 shall continue and the minimum amount which may be h ld in the Bond Reserve Account shall be increased to $240,000. SECTION 13. Disposition of Bond Proceeds. The p oceeds of the Bonds (including accrued interest to the date of issuance and delivery of the Bonds) shall be applied by the Fiscal Agent as follows: (a) The Fiscal Agent shall deposit to the credit o the Principal and Interest Account the accrued interest to the d to of issuance and delivery of the Bonds. (b) The Fiscal Agent shall next deposit to the C nstruction Fund the balance of the proceeds of the Bonds. SECTION 14. Bonds Equally Secured Under Ordinance No. 8 39. Except as to differences in the maturates thereof, in the r tes of interest, the provisions for redemption, the Bonds a thorized herein shall be on a parity with and shall be entitled t the same benefit and security of Ordinance No. 8639 and the 1 78 Bonds issued thereunder. Except as specifically provided h rein and to the extent permitted by Ordinance No. 8639, the B nds herein authorized is and shall be governed by all of the P ovisions of Ordinance No. 8639, including, without limitation, t e provisions with respect to the collection and disposition of r venues, the covenants of the City, the nature and extent of the s curity for the Bonds, the City's right to issue additional b nds, the rights, duties and obligations of the City, the rights o the owners of the Bonds, and the provisions relating to a endments, events of default, the Fiscal Agent and enforcement. Ir case any provision, covenant, stipulation, obligation or a reement contained in the Bonds or in this Ordinance shall for a y reason be held to be in violation of, or contrary to or in c nflict with the provisions of Ordinance No. 8639 of the City, —22— th.n the provisions of this Ordinance shall be deemed to co trol. (c) The City hereby authorizes and directs the Fiscal Ag.nt to act on its behalf with respect to the rebate r. uirement described in Treas. Reg. 1.103-15AT(d), and the F' cal Agent consents to the creation of the agency for the ex ress and limited purpose of complying with such rebate re uirement. Pursuant to this agency, the Fiscal Agent agrees to make timely determination and to make timely payments of the R ate Amount (from funds provided by the Borrower) to the United States. For purposes of this subsection, the Rebate AmPunt shall mean the amount equal to the sum of —23— SECTION 15. Non—Arbitrage Covenant. (a) The City co enants and agrees that it will cause the proceeds of the Bonds to be applied as soon as practicable and with all reasonable di patch for the purposes for which the Bonds are issued, and the Ci y and the Fiscal Agent covenant and agree that no part of the pr coeds of the Bonds shall be invested in any securities or ob igations except for the temporary period pending such use, nor us .d at any time, directly or indirectly, in a manner which, if su h use,' had been reasonably anticipated on the date of issuance of the Bonds, would have caused any of the Bonds to be or become "a bitra:ge bonds" within the meaning of Section 1:03(c) of the Co a and the regulations of the Treasury Department thereunder pr posed or in effect at the time of such use and applicable to ob igations issued on the date of issuance of the Bonds. (c) The City hereby authorizes and directs the Fiscal Ag.nt to act on its behalf with respect to the rebate r. uirement described in Treas. Reg. 1.103-15AT(d), and the F' cal Agent consents to the creation of the agency for the ex ress and limited purpose of complying with such rebate re uirement. Pursuant to this agency, the Fiscal Agent agrees to make timely determination and to make timely payments of the R ate Amount (from funds provided by the Borrower) to the United States. For purposes of this subsection, the Rebate AmPunt shall mean the amount equal to the sum of —23— (b) In the event that any funds (including investment proceeds) remain in the Construction Fund or the Bond Reserve Fund, on the date six months after the Date of Issue, the City and the Fiscal Agent shall limit the investment of Gross Proceeds in Non—purpose Obligations as follows: At all times during each Bo id Year, the aggregate amount of Gross Proceeds of the Bonds in jested in Non—purpose Obligations, the Yield on which is higher than the Yield on the Bonds shall not exceed 150% of the Debt Se vice on the Bonds for such Bond Year. The aforementioned liitation shall be deemed satisfied provided the aggregate am unt of Gross Proceeds of the Bonds invested in Non—purpose Ob igations the Yield on which is higher than the Yield on the Bo d is reduced not later than thirty days after each payment of p ncipal which reduces the annual Debt Service on the Bonds as pr vided in Treas. Reg. 1.103-15AT(c). For purposes of this su section, the aggregate amount of Gross Proceeds of the Bonds injested in Non—purpose Obligations shall be determined without regard to Gross Proceeds of the Bonds which are invested in No —purpose Obligations during the temporary periods described in Traas. Reg. 1.103-15AT(c)(2), including but not limited to the t ee—year temporary period applicable to certain construction fulds, the one—year temporary period applicable to (i) the reinvestment of investment proceeds, and (ii) amounts received f m the investment of a sinking fund, the thirty—day temporary pe iod applicable to amounts accumulated in a sinking fund, and t thirteen—month temporary period applicable to bona fide debt se vice funds. (c) The City hereby authorizes and directs the Fiscal Ag.nt to act on its behalf with respect to the rebate r. uirement described in Treas. Reg. 1.103-15AT(d), and the F' cal Agent consents to the creation of the agency for the ex ress and limited purpose of complying with such rebate re uirement. Pursuant to this agency, the Fiscal Agent agrees to make timely determination and to make timely payments of the R ate Amount (from funds provided by the Borrower) to the United States. For purposes of this subsection, the Rebate AmPunt shall mean the amount equal to the sum of —23— 1 (i) the excess of (A) the aggregate amount earned from the date of issue on all Non -purpose Obligations in which Gross Proceeds of the Bonds are invested [other than amounts attributable to the excess described in this clause (i)], over (B) the amount that would have been earned if the yield on such Non -purpose Obligations [other than amounts attributable to the excess described in this clause (i)] had been equal to the Yield on the Bonds, plus (ii) any income attributable to the excess d scribed in clause (i). T e Rebate Amount shall be calculated as provided in Treas. R g. 1.103-15AT(d) and paid in accordance with the provisions o Treas. Reg. 1.103-15AT(e) from payments made under the Lease. Unless the City makes a written election to the c ntrary prior to the Date of Issue of the Bonds, the aggregate a ount earned on a bona fide debt service fund and allocated to s ch fund, shall not be taken into account in determining the R bate Amount if the gross earnings on such fund for the Bond Y ar are less than $100,000 as provided in Treas. Reg. 1 103-15AT(d)(4). The Rebate Amount shall be deemed equal to zero and t ere shall be no rebate requirements if all Gross Proceeds of t e Bond [other than Gross Proceeds held in a bona fide debt s rvice fund as provided in Treas. Reg. 1.103-15AT(d)(5)] are e pended for the governmental purpose for which the Bonds are i sued within six months after the Date of Issue of the Bonds. (d) The City and the Fiscal Agent shall not make or a ree to make any payment or participate in any transaction, tie effect of which is to reduce the Rebate Amount required to bd rebated to the United States under Treas. Reg. 1.108-15AT(d). "Bond Year" shall mean the one-year period beginning ov the day after the expiration of the preceding Bond Year of the Bond. The first Bond Year of the Bond begins on the Date o Issue and ends one year later, as described in Treas. Reg. 1 103-15AT(b)(9). "Costs of Issuance" means any and all expenses of w atever nature incurred in connection with the issuance and s le of the Bonds, including but not limited to underwriting f es and expenses, underwriting discount, bond and other p inting expenses, and legal fees and expenses of counsel. -24- "Non—Purpose Obligations" means any security or any obLigation [other than an obligation described in Section 103(a) of the Code] in which Gross Proceeds of the Bonds are injested and which is not acquired to carry out the gojernmental purpose of the issue, as described in Treas. Reg. 1. 03-15AT(b)(2). "Debt Service" shall mean the scheduled amount of shall mean interest and amortization of principal payable for that Bond c Ye r, as described in Treas. Reg. 1.103--15AT(b)(5). of all payments of principal and "Gross Proceeds" shall mean (i) original proceeds, to be (i ) investment proceeds, (iii) transferred proceeds, (iv) am unts held in a sinking fund, (v) amounts held in a as described reasonably required reserve or replacement fund, (vi) se urities or obligations pledged as securities for payment of de )t service on the Bonds by the City (or a related person), th Lessor or by a governmental unit of which the City is a pa t; (vii) amounts received with respect to acquired purpose ob igations, (viii) amounts used to pay debt service on the Bo ds and (ix) other amounts received as a result of investing tit amounts described hereinabove, as described in Treas. Reg. 1 03-15AT(b)(6). "Non—Purpose Obligations" means any security or any obLigation [other than an obligation described in Section 103(a) of the Code] in which Gross Proceeds of the Bonds are injested and which is not acquired to carry out the gojernmental purpose of the issue, as described in Treas. Reg. 1. 03-15AT(b)(2). SECTION 16. Authorization of Supplemental Lease. The Ma jor and City Clerk are hereby authorized to execute the S plemental Lease dated as of April 1; 1987, substantially in t form attached to this Ordinance, including any changes n essary to correct omissions or ambiguities therein. The Mi or and City Clerk are further authorized and directed to e cute and acknowledge an assignment by the City to the Fiscal Aant of the City's interest in the Supplemental Lease which a ignment shall be effective to assign to the Fiscal Agent all ol the City's rights, duties, responsibilities and obligations urder this Ordinance and the Supplemental Lease excepting only t se rights, duties, responsibilities and obligations under ttis Ordinance and the Supplemental Lease which may only be properly and lawfully exercised by or imposed upon the City. SECTION 17. Guaranty Agreement. As and for an e>press condition precedent to the issuance and delivery of the Bonds, there shall be executed and delivered by Tenant and the Fiscal Agent a Guaranty Agreement dated as of April 1, 1987, w ereby Tenant and United Presbyterian Foundation of Kansas guarantee to the Fiscal Agent for the benefit of the registered ouiner of the Bonds, the payment of principal of and interest on the Bonds when and as the same become due and payable. SECTION 18. Authorization of Bond Purchase A41reement. The Mayor and City Clerk are hereby authorized to —25— "Yield" shall mean the yield which when used in c puting the present worth of all payments of principal and irterest to be paid on the Bonds produces an amount equal to the issue price as described in Treas. Reg. 1.103-15AT(b)(3). SECTION 16. Authorization of Supplemental Lease. The Ma jor and City Clerk are hereby authorized to execute the S plemental Lease dated as of April 1; 1987, substantially in t form attached to this Ordinance, including any changes n essary to correct omissions or ambiguities therein. The Mi or and City Clerk are further authorized and directed to e cute and acknowledge an assignment by the City to the Fiscal Aant of the City's interest in the Supplemental Lease which a ignment shall be effective to assign to the Fiscal Agent all ol the City's rights, duties, responsibilities and obligations urder this Ordinance and the Supplemental Lease excepting only t se rights, duties, responsibilities and obligations under ttis Ordinance and the Supplemental Lease which may only be properly and lawfully exercised by or imposed upon the City. SECTION 17. Guaranty Agreement. As and for an e>press condition precedent to the issuance and delivery of the Bonds, there shall be executed and delivered by Tenant and the Fiscal Agent a Guaranty Agreement dated as of April 1, 1987, w ereby Tenant and United Presbyterian Foundation of Kansas guarantee to the Fiscal Agent for the benefit of the registered ouiner of the Bonds, the payment of principal of and interest on the Bonds when and as the same become due and payable. SECTION 18. Authorization of Bond Purchase A41reement. The Mayor and City Clerk are hereby authorized to —25— ex.cute the Bond Purchase Agreement with respect to the Bonds, su stantially in the form attached to this Ordinance, including an changes necessary to correct omissions or ambiguities therein. SECTION 19. Invalidity of Provisions. If any one or more of the covenants, agreements or provisions of this Ordinance or of said Supplemental Lease should be held contrary to the policy of express law, though not expressly prohibited, or against public policy, or shall for any reason whatsoever be h el d invalid, then such covenants, agreements or provisions shall b4 null and void and shall be deemed separate from the re aininIg covenants, agreements or provisions, and shall in no waif affect the validity of the other provisions of this Ordinance or of the Bonds issued hereunder, or the Supplemental Lease. SECTION 20. Waiver of Ad Valorem Tax Exemption. The Bolds of the City as authorized by this Ordinance shall be is ued upon the express condition that the Tenant will waive anj ad valorem property tax exemption which would or might of erwise be available with respect to the Facility under the prpvisions of K.S.A. 79-201(a) Second, as amended. SECTION 21. Further Authority. The City shall, and th officers, agents and employees of the City are hereby au horized and directed to, take such actions, expend such fu ds and execute such other documents, certificates and i truments as may be necessary or desirable to carry out and comply with the provisions of this Ordinance and to carry out, comply with and perform the duties of the City with respect to t Bonds, the Ordinance, the Supplemental Lease and the Bond Pu chase Agreement all as necessary -to carry out and give e ect to the transactions contemplated hereby and thereby. SECTION 22. Effective Date. This Ordinance shall t e effect and be in full force from and after its adoption by t Governing Body of the City. PASSED AND APPROVED by the Governing Body of the City of Salina, Kansas, this 20th day of April, 1987. By: ZZ .//' ose M. Ritter, Mayor A est: D. . Harrison, City Clerk (Jeal) —26— 1 1 SCHEDULE I SCHEDULE I TO ORDINANCE NO. 87-9180 OF THE CITY OF SALINA, KANSAS AND TO IHE SUPPLEMENTAL LEASE DATED APRIL 1, 1987, BY AND BETWEEN SAID CITY AND SALINA PRESBYTERIAN MANOR, INC. AUTHORIZED BY SAID ORDINANCE. FACILITY ADDITIONS The Facility additions will five (5) additional duplex existing facility, which will —27— include the construction of buildings adjacent to the provide 10 residential units.